SunWorks Inc (SUNWQ)

[Chiinkwia1]

In general, a price change on relatively low volume for a particular stock suggests an aberration, whereas a price change on high volume portends a genuine trend reversal. An active trader looks at volume to determine a price trend and the obvious goal is to trade in the direction of the major price trend. One of the best times to buy is when a stock is going down on low volume (with no news) as compared to recent increases on higher volume. This suggests that the selling is lighter and that the holders of the stock that are going to sell have finished selling and the rest are holding. The sellers of the stocks then may come back into the market when they see the price stabilize. It's also not a bad idea to sell on high volume on the way up (if the volume appears to be tapering off), as this usually creates abnormally high prices that cannot be maintained very long


The basic theory is this: if price and volume are moving in the same direction, the trend of the stock price will continue. If they are running counter to each other, the trend will reverse.

http://www.moneyshow.com/articles.asp?aid=daytraders-4676